Many people with bad credit are required to have a cosigner on loans and credit applications. However, when times are tough and the borrower falls behind, the cosigner is often on the hook.
Thinking about filing for bankruptcy but don't want to affect the finances of your friends and family cosigners?
Get the straight facts about what's involved in bankruptcy by speaking with a bankruptcy attorney in your area. Simply fill out the quick case review form below to get started now.
Cosigners are like the financial equivalent of spotters at the gym - if you can't make your loan payments, your cosigner is generally legally obligated to bail you out by seeing that your loan is repaid.
A cosigner typically has a stronger credit history than the primary borrower, and so helps the borrower qualify for more attractive loan terms.
So how are your cosigners (or "codebtors," as they're often called in legal documents) affected if you file bankruptcy? That depends largely on which chapter of the U.S. Bankruptcy Code you file under.
Keep in mind that, before you file bankruptcy, any late or missed payments on a loan for which you have a cosigner will likely hurt your cosigner's credit as well as your own. And cosigners for business loans (rather than personal ones) are usually not protected in bankruptcy.
While a Chapter 13 bankruptcy may benefit your cosigner more than a Chapter 7 bankruptcy would, keep in mind that you have to file under the chapter that works best for your finances and your financial recovery.
Your cosigner signed a legal document guaranteeing payment of a loan and took on considerable responsibility when he or she did so.
Because this can be a delicate matter (especially when family and friends are involved), consider talking with a bankruptcy lawyer about which chapter may best address your financial needs and how to deal with cosigners:Speak with a Bankruptcy Lawyer Today
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.